You know how to turn a house into a home, and you’ve had plenty of practice sprucing up your own space throughout the years. If you have a knack for making houses livable and attractive, flipping homes is a great side hustle that can generate a tidy sum when done correctly.
House flipping is much more than a kitchen renovation and all-over paint job. It takes research, patience, and responsible financial planning. Here you can review the most important aspects of flipping a home and decide whether the undertaking can benefit your Winchester real estate portfolio.
2023 Winchester housing market analysis
The Winchester housing market is on the colder side in 2023. Though the number of properties for sale had rebounded in April, homeowners generally aren’t looking to sell. The median price for residential properties was a robust $1.6 million as of April 2023.
As of June 2023, Kim Covino & Co. had access to 51 publicly listed properties in Winchester. Of the 32 residential properties, about half were listed above $1.8 million; the median list price was about $1.85 million. Buyers in the top decile of the market can expect to find estates with five or more bathrooms, five or more bedrooms, and over 4,000 square feet.
As an investor, you still have plenty of room to gain a profitable ROI when flipping a Winchester house. As interest rates decrease into 2024, you’ll likely find buyers willing to invest in a recently renovated home full of on-trend designs and appliances.
How to find the right Winchester homes to flip
You’ve most likely heard the term “good bones,” which refers to a structurally decent home with room for improvement. When finding a house to flip, don’t fear an ugly property — sometimes, a project may look more challenging to renovate than it actually is. The most critical part is securing a house with a good foundation. With a structurally intact home, you can focus your investment funds elsewhere on the property. These elements include the roof, electrical composition, plumbing, etc.
The home's layout is another important aspect when deciding if and how to flip it. Today, many homebuyers are looking for a spacious house with an open floor plan to mingle with guests and create breathing room. Houses that are sectioned into many separate rooms on the main floor may be expensive to expand. During your initial inspection, you will have to consult with plumbing and electrical professionals to see what walls can come down and which are structurally necessary.
While the physical property must be appraised carefully, an essential aspect of flipping a house is finding the right neighborhood for the project. Highly desirable areas near good schools will attract families and individuals looking to put down roots in Winchester. The downside to working in these neighborhoods is the high property costs. The best thing to do is find houses for sale by owner or owned by sellers looking to sell quickly — contingencies in such properties tend to be more flexible and cost-effective.
How to finance home flips in Winchester
Financing a flip can be done by using your savings, allocating money from friends and investors, taking out a loan, or a combination of the three. For the most part, house flippers choose a loan so they have enough funds to cover any mishaps or expenses. You can select from a couple of loan options when deciding how to fund your house flip.
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Conventional private lenders: These are banks and other financial institutions. They tend to require a good credit score and specific debt-to-income qualifications. Some private lenders will not offer a loan for homes that are damaged or in poor condition.
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Hard money lenders: These are individuals or investment organizations that loan money for short-term projects like house flipping. These loans are secured against investment property and tend to have fewer barriers when it comes to approval.
When deciding how much you can afford to put into purchasing a home to flip, stick to the 70% rule, which states you should never pay more than 70% of the home's ARV (after repair value). On average, you can expect a 33.3% ROI from flipping a house in Massachusetts, and as long as you’re practical about features and upgrades, you may easily make more.
Tips for creating a valuable home
Not every house you flip will be a total gut job, meaning you will mostly have to decide which areas of the house to pay the most attention to. Flippers generally spend a great deal on the kitchen and bathrooms, as they are rooms where people spend a large portion of their time in the home. Bathroom remodels yield a 70% ROI and kitchen upgrades lead to a 67% value recovery, so you’ll get your money’s worth by focusing on these areas. Kitchens should include highly functional islands with features like refrigerated drawers, sinks, or dual dishwashers.
One of the best choices you can make when flipping houses in Winchester is to keep every upgrade or interior design choice on the neutral side. Sure, owning a bespoke home with futuristic features is terrific, but many buyers really want a place to grow. Give them a good starting point, and don’t fill in too many blanks by going crazy with wallpaper or unnecessary outdoor upgrades.
Don’t let your flip flop
Whether you’re looking for assistance in buying a home to flip in Winchester, or you need a listing agent at your side once the property has been shaped up, Kim Covino can give you the best introduction possible to the Winchester real estate market. Call Kim today for expert advice on how to find the right home to flip and where to find the right buyer for your newly renovated space.
*Header photo courtesy of Shutterstock
